Ice cream will see a price hike this summer due to coconut oil and Philippine diesel.

The price of coconut oil has soared on wholesale markets, hitting a dizzying $2.700 per tonne. The Philippines, Indonesia and India, which together account for 75% of global production, have seen a significant decline in harvests, and it is no coincidence that this price escalation revolves around weather phenomena and new market needs.

It all started with El Niño

After heating up the spirits, El Niño also set coconut crops ablaze, causing unusually hot and dry weather in Southeast Asia. And while humanity was enjoying the first warm spring days, coconut palms were already struggling. “A coconut tree takes 12 to 18 months to produce a new crop” and the result of this delay will be felt for years, worsening an already delicate market situation.

A second blow

But that's not all; demand for coconut oil has accelerated due to the biodiesel boom and its growing popularity in the beauty industry, thanks in part to the influence of social media. Coconuts are being diverted from the food market to the cosmetics market, further inflating prices. “Every additional percentage point means diverting approximately 900 million coconuts to the biofuel market,” warns Bloomberg's energy analyst. Here sustainability comes at a cost that consumers must pay.

The relationship between the two things

Every coconut used for biodiesel is one less coconut to keep the ice cream in the cone. What's more, energy companies, thanks to government subsidies, can absorb the costs without too much trouble. The result?“Food brands are at a disadvantage”, while consumers face price increases for their beloved summer desserts.

In a summer that promises to be a scorcher, coconut ice cream is not just a dessert to be enjoyed. It is a symptom of a trade war pitting the food and energy sectors against each other, with Filipino motorists and consumers at large suffering the consequences with every spoonful of freshness.